Categories: BUSINESS & FINANCE

How to Lay Off an Employee

If you are a boss at a company, you may have to lay off some employees. A layoff is never something that anybody enjoys. It is different from firing somebody for doing a bad job. Instead, it has to do with how the company is doing and how many employees the company can afford to keep employed.

If you are going to lay off anybody from your company, you are going to need the following things:

Knowledge of Employment Law

Severance paperwork

Compassion

Civility

There can be many legal issues when it comes to layoffs. You should always make sure to talk to a local attorney before laying off anybody to make sure that you are following all local employment and layoff laws.

There is an act known as the Federal WARN act. This means that if you are going to lay off 50 or more employees and you have at least 100 employees, you must give the employees that are going to be laid off a 60 day notice that they are going to be layed off.

You need to have the proper paperwork prepared before laying off a person. Make sure it contains a severance package, information on continuing health insurance, a final paycheck, and any other important information from their employment that they might need while unemployed and at a new workplace.

Usually, severance is determined by the employer. However, a general rule for severance pay is to give an employee one to two weeks worth of pay for every year of employment. This means that if an employee was with a company for ten years, they should get either ten or twenty weeks pay as severance.

If an employee does not understand why they are being laid off, they are more likely to sue the company. It is important to give a reason why the employee is being laid off and also to show a good explanation so the employee truly understands.

Severance packages should always be based on company policy. Never should a severance package be based on personal feelings. You may have a favorite employee that has to be laid off due to the budget along with one that you don’t like so much. However, if they both did their job well, it is not fair to give your favorite employee a better severance package. If this happens, it gives the other employee a right to sue.

A good idea when issuing a severance package is to include an agreement that the worker signs saying that he will not sue you. However, you must remember, that under federal law, there are some workers that have up to 45 days to change their minds after being layed off.

If you are laying off a good employee, a good idea would be to offer writing a letter of recommendation.

Always be civil and compassionate. Judge if you can let the employee gather up his belongings or if he needs to be escorted out of the building immediately.

BajillionairesClub, How to Lay Someone Off, Howcast